Posted by: The Life and Legacy Planning Group
Coronavirus has been all over the news—and with good reason. For some people, it can turn into a serious illness if contracted. It is crucial for everyone, to continue to take all the steps necessary to protect those around us who are more vulnerable to becoming seriously ill if they are exposed to the coronavirus. We should all care for our neighbors and communities, staying home if sick, washing our hands frequently, sanitizing frequently touched surfaces, and implementing any other steps recommended by health experts.
It is a wake-up call to those who have been putting off creating or updating an estate plan. None of us knows what tomorrow will bring, so for your own peace of mind and the good of your loved ones, it is important to stop procrastinating.
There are several key documents an estate plan should include to protect you and your family if you should suddenly become very ill or pass away:
Last Will and Testament and/or a Trust
A Will enables you to specify the individuals you would like to receive your money and property. In addition, you can name guardians to care for your children or other dependents if you are unable to do so and to handle their financial needs. For many, however, a Will alone is not the best solution, as it is only effective after you pass away.
In a Revocable Living Trust, you can name yourself as a trustee and continue to exercise control over the money and property you transfer to the trust. However, it also enables you to name a co-trustee or successor trustee who can manage your money and property for your benefit and the benefit of any other beneficiaries of the trust if you become too ill to do it yourself. In addition, your trust can specify when and how the funds should be distributed to your beneficiaries when you pass away. Further, if you have transferred all your property to the trust, it will not have to go through the probate process—which can be expensive, time consuming, and open to any member of the public.
For some, other types of trusts may be appropriate to achieve particular goals, for example, protecting assets from creditors or providing for a child with special needs.
Note: If you do not create a Will or Living Trust specifying who you would like to receive your money and property when you die, the state will prepare a “Will” for you. In that event, your estate will pass to the individuals specified in the state intestacy statute, who will receive the shares mandated by the statute. Obviously, this is not optimal, as the people and shares spelled out in the statute may be vastly different from what you would have specified in your estate planning. Moreover, probate is required for the administration of your estate if you die without a Will or Living Trust. In addition, a court will have to appoint a guardian to care for your children—and the person appointed may not be the individual you would have chosen.
Powers of Attorney
Using a power of attorney, you can name people you trust to make decisions on your behalf if you become ill and are unable to make them for yourself. Even if you are married, your spouse may not have the authority to make all of these types of decisions for you without the proper documentation.
A Power of Attorney for Health Care can be used to name a trusted person as your agent to make medical decisions on your behalf if you are unconscious or otherwise unable to communicate them to your health care provider. As your agent, the person you have named is required to act in accordance with your wishes to the extent that they are known to that individual, so it is important to communicate important information regarding your preferred providers, medical conditions, treatments you do not want, religious convictions, and other pertinent information.
A Power of Attorney for Property, or financial Power of Attorney, will allow the person you have named as your agent to make financial decisions and conduct business on your behalf if you cannot handle these matters for yourself. It can be as broad or as limited as you choose: For example, you could authorize a trusted individual to run your business for you, or you could simply authorize another person to write checks and pay your bills on your behalf.
Note: If you do not name trusted individuals to act for you in medical and financial powers of attorney, your family members, including your spouse under some circumstances, will have to go to court to be appointed as your Guardian. As in the situation in which you do not have a Will or Living Trust, you no longer have any control over who is named to act on your behalf. The person appointed by the court may not be the person you would have wanted to take on these important roles.
Your Living Will is a document that clearly spells out your wishes for the end of your life, for example, whether or not you want to be placed on life support if you are in a vegetative state or have a terminal condition. This important document allows your family and health care providers to understand your wishes even if you are no longer able to communicate them.
You can use Memorial Instructions to provide information to your family and loved ones about your wishes for your service, people who should be notified when you pass away, instructions regarding your remains, and information you would like to be included in your obituary. If you do not provide this information in advance, your grieving family will be left to guess about what you would have wanted after you pass away. This could lead to unnecessary stress and conflict at a time when they are likely to be feeling emotionally overwrought.
Give Us a Call
Certain situations can bring our own mortality to the forefront of our minds, even if they don’t currently have a severe or direct effect on us. The coronavirus has affected a number people in the United States so far. It provides a reminder of just how important it is – not only to us, but also to our family members and loved ones — to have an estate plan in place in case the unexpected happens. Our foremost goal is to help you have confidence that if you become ill, your own care and the needs of your family will be addressed.
Call us today to set up a meeting, which can occur virtually, through a web or telephone conference.